Oil and gas sector in Falkland Islands continues to advance: Report

The oil and gas sector in the Falkland Islands is witnessing a steady increase even as the industry continues to face several challenges, as observed by a new report from GlobalData, titled ‘Falkland Islands Steadily Advances Towards First Oil’.

With the formation of new government in Argentina, consolidation of local industry and low cost environment, its first project - Premier Oil's Sea Lion- is heading towards commercialization.

Under the earlier administration of Kirchner, firms operating in the territory were not allowed to take part in Argentina.

GlobalData expects these conditions to change under the new presidency of Mauricio Macri, with the new government indicating market friendly policies including rolling back of regulations, re-accessing international financial markets and encouraging overseas investments into the country.

It is expected that a special agency set up by President Cristina Kirchner in 2013 to look into issues related to Falkland Islands will be closed.

GlobalData Energy Americas senior upstream analyst Adrian Lara said: "For the Argentinian government, a formal change in the discourse about Falkland Islands represents a good opportunity in sending a clear signal that they are serious at changing their international strategy.

"Argentina's oil and gas sector is actually doing pretty well in the current low price environment mainly helped by government controlled prices, however, more strategic incentives could be offered to oil and gas companies and that could lead to more investment into existing unexplored formations in onshore and offshore Argentina."